Pakistan’s consumer price inflation slowed to 17.3% in April from a year earlier, data from the statistics office showed on Thursday, the lowest reading in nearly two years and below the finance ministry’s projections.

Pakistan has been beset by inflation above 20% since May 2022. Inflation jumped as high as 38% in May 2023, as the country navigated reforms as part of an International Monetary Fund bailout programme.

Month-on-month inflation fell 0.4%, dipping into negative territory for the first time since June 2023.

In its monthly economic report, Pakistan’s finance ministry said it expected inflation to hover between 18.5% and 19.5% in April and ease in May to 17.5%-18.5%.

“The inflation trajectory is slowing primarily on account of food inflation which has slowed down considerably,” said Faizan Kamran, CEO of FRIM Ventures, a Karachi-based investment and research company.

Kamran added that he expects inflation to fall into single digits in the next five to six months.

Pakistan’s central bank kept its key interest rate unchanged at 22% on Monday, hours before the IMF executive board approved $1.1 billion in funding under a $3 billion standby arrangement signed last year.

An IMF statement following Monday’s approval by the board said that inflation, while still elevated, continues to decline, and, with appropriately tight, data-driven monetary policy maintained, is expected to reach around 20 per cent by end-June.

The bank’s monetary policy committee said it was “prudent” to continue with its monetary policy stance to bring inflation down to the target range. It has left the rate unchanged for seven straight policy meetings.

Antoinette Sayeh, Deputy Managing Director and Chair at the IMF, said Pakistan’s central bank’s tight monetary policy stance remains appropriate until inflation returns to more moderate levels.

Pakistan plans to approach the IMF again for a longer-term programme by early July. The country completed its nine-month standby arrangement earlier this week.